Is Your Organization In a Rut?

Organizations often find themselves becoming increasingly trapped by stale forms of thinking and doing business. They get into a rut! By the time they recognize the rut they are in, they may lack the ability to extract themselves from it. We propose a method for performing such an extraction by using concepts from a branch of cell biology called “epigenetics,” which studies the manner in which living cells are differentiated and stabilized by inner network processes and, in effect, also get into ruts. For the cell, stabilized ruts are necessary for development, but for the organization, they can lead to stagnation.Differentiation and Stabilization of Living CellsLiving organisms pass through a succession of microscopic cellular changes during embryonic development that lead to the emergence of the fully formed fetus. These cellular changes are the result of “differentiation,” which is a complex process during which stem cells, which have the potential to become virtually any type of cell, become differentiated into specific types of cells, such as nerve cells, blood cells, etc. The process of differentiation is also accompanied by stabilization, as the new forms of cells become increasingly adapted to their roles and exhibit less and less likelihood to revert back to earlier forms. We might say that the cells are “getting into a rut!” In cellular development, this “rut” is a good thing, but when it occurs during the development or ongoing operation of an organization, it is not always so good.

Gerald Burrill, the former Episcopal Bishop of Chicago once said: “The difference between a rut and a grave is the depth.” Fortunately, we can learn from our cells how to escape organizational ruts before they become our graves. In fact we propose that there is a set of analogous processes that govern both the development of living organisms and of functioning organizations, so we can use what we learn about one to control the other.

Waddington’s Epigenetic LandscapeOne of the earliest biologists to suggest a mathematical foundation for cellular development was Conrad Waddington[1]. Waddington was particularly concerned with “genetic assimilation,” the processes by which properties of an organism’s external physical structure, its “phenotype”, ultimately become encoded within its internal genetic instruction set, its “genotype”. Waddington proposed this happened through a process called “epigenetics,” where genes in the cell’s DNA combined with a surrounding set of proteins to create networks of activity that led to the desired assimilation.

Waddington envisioned the set of all states that resulted from the relationship between the cell’s genes and their protein environment as forming a structured surface that he called the “epigenetic landscape.”

The epigenetic landscape was tilted and it contained deepening channels along which a developing organism was guided along its path to differentiation. He envisioned the process, metaphorically, as a ball rolling down a hillside, guided through a complex of channels of increasing depth, under the action of a driving force like gravity. Of course in the cell, the force would have to be entirely different from gravity.

The depth of a channel stabilized the development of the organism by ensuring that a few small mutations would not cause the organism’s phenotype to change radically. In other words, once in a channel, it would be difficult for the ball to roll up and over its surrounding walls and fall into a neighboring channel. This was the formation of the rut.

It’s All Networks and Entropy!In Waddington’s view, the shape of the epigenetic landscape was the result of complex chemical processes between proteins and the genetic material in the cell. These processes required that sets of genes interact with specific proteins at precise times. In modern network terms, this can be described by a “gene regulatory network” (GRN) or a “protein interaction network” (PIN). We propose that the internal operations of organizations can be described by analogous networks, in which there are organizational analogs of genetic material, proteins that activate their operation and rules that govern these interactions.

Recently there have been attempts to assign a form of “entropy” (a measure of possibilities) to the complexity of GRNs and PINs to characterize possible future behaviors of developing cells[2]. It has even been suggested that it is this entropy that plays the role of gravity in guiding a cell down its epigenetic landscape. This analysis indicates that cells such as stem cells and certain cancer cells are highly undifferentiated with many options for future development through the activity of their networks. These cells have a high entropy and sit in a shallow channel, whereas cells that have already been differentiated (eg., have become nerve cells or epidermal cells) have a lower entropy and move in a deeper channel. The strong suggestion is that once a cell has become differentiated and finds its channel, it will not reverse the process. We suggest that organizations also find themselves in channels, which in their case we have called ruts, but that such irreversibility need not apply to them.

Entropy as a Driver of Knowledge Generation and Innovation in OrganizationsWe have developed the “Innovation GenotypeTM ” which is a representation of all technical competencies that can be gleaned from an organization’s portfolio of patents, publications and the inventors and innovators that created them. We treat these elements as analogs of genes and we propose that there also exists analogs of proteins that “activate” these elements. The combination of these elements form the core of an organization’s network structure. Moreover, these networks have an entropy by virtue of the complexity of their interactions. It is this entropy that ultimately drives organizational creativity.

Entropy in Organizational Processes: Escaping Your RutMetaphorically, every organization has a “genotype” equivalent and a “phenotype” equivalent. The phenotype describes the organization as it affects and is affected by all those in its environment, i.e., its customers, its supply chain, its competitors, its ecosystem, etc. The genotype of the organization describes the internal dynamics of its activities that are supported by its technical competencies acting through its networks. These networks are structured by the social interactions of its employees and the resulting flow of technical knowledge between them and, more generally, by the interactions between the organization’s internal structure and the outside world. The epigenetic, network-based processes that are relevant to the organization are mediated by the signals, actions, policies, practices, and information carriers that make the genotypic structures responsive to the external interactions with its phenotypic structure. In short, the organization internally “assimilates” the successes attributed to its phenotype and begins to stabilize its productive processes to maintain those successes.

Not every influence on the phenotypic structure of an organization is immediately assimilated in its genotypic structure. No organization can be so responsive to the wants of its customers or the offerings of its suppliers, that it continually changes its internal structure to reflect that responsiveness. Indeed, the evolutionary history of living organisms is replete with examples where the delay between perturbations of the phenotype and assimilation of responses in the genotype led to phenotypic responses to perturbations that were no longer present. So we must imagine that the organizational genotype contains the potential to respond to a multiplicity of external stimuli within some appropriate time, but these responses do not all become permanent parts of its genotype and those that do, become permanent as part of a gradual assimilation process that leads to organizational development.

Injecting Entropy into an OrganizationWe have developed several methods for raising a mature, already differentiated organization out of a deep, low entropy channel that has stifled creativity and made it resistant to change. In this way, we can turn it into a more agile and creative organization. The origin of these deep channels may be a poorly functioning organizational network, a lack of genetic diversity, an inappropriate culture or the stubborn adherence to an inflexible and ineffective problem-solving paradigm. Each of these possible causes can be addressed by the injection of positive entropy into organizational network structures, metaphorically tilting the epigenetic landscape and changing the structure of its channels. Our goal is to retain desired traits favorable to the success of the organizational phenotype, while allowing easier switching between different channels to promote innovation. At the very least, we can place the organization at a higher vantage point from which to see the existence of other channels that are beyond the horizon of the channel it presently occupies.

Entropy can be injected at the individual gene level or at the network level. To do this, we first need to determine your Innovation GenotypeTM, defining your genes in the sense of technical competencies and the people that activate them. Then, we visualize your Innovation NetworkTM, giving us the interactions between your inventors, which is essentially the wiring diagram of your network. At one level, the set of genes can be altered by inserting new competencies or eliminating old ones. We do this by analyzing the Innovation GenotypeTM and comparing it with exemplary genotypes of competitors or collaborators to see which genes are no longer appropriate or which new genes are needed. Genetic “engineering” can then be done using consultants, promoting collaborations with academia or using innovation-enhancing processes such as our own “Insight Driven InnovationTM” (IDI) process. Alternatively, instead of altering the set of genes, entropy can be injected by “re-wiring” the organizational network structure, which changes the manner in which genes interact with each other. If the rut has been formed as a result of a poor problem solving paradigm, we can introduce our Insight Driven InnovationTM (IDI) process or our Friday Process, both of which effectively re-wire the network by introducing new approaches and tools for problem solving. If the rut is the result of an inappropriate culture, we can introduce changes through our “Culture of Collective IntelligenceTM” (CCI).

Injecting entropy can also be accomplished “virtually,” by establishing an environment that simulates a new interaction network. We have done this through game-playing that simulates the transfer of information between genes. For example, organization members that represent different competencies can be asked to exchange exemplary problems with other organizational sectors and to attempt to solve them using the tools and methods of the other domain. This type of cross-fertilization process identifies and activates people with specific technical competencies and forces them to react in unaccustomed ways, analogous to the re-wiring of a network. Alternatively, a previously solved exemplary problem can be re-solved, but only after first eliminating some of the competencies that were necessary to obtain the previous solution. Methods analogous to these have been found to actually arise spontaneously in damaged biological organisms and cause GRN or PIN rewiring in their cells[3]. So, if you sense an organizational rut trapping your organization, it needs an injection of entropy to introduce a wealth of new possibilities.